Here Is How Amazon's Ugliest Quarter In Years Looked Like In Six Charts

Just when we thought "the world's marketplace" Amazon couldn't possibly report any uglier quarterly numbers, it goes and proves us wrong. First, it reported an EPS loss of $0.27, vs the $0.15 expected as a result of ($126) million in Net Income. The operating loss was "only" $15 million compared to an expectation of $64 million, however this appears the result of pulling forward wales into Q2 since the Company also announced that the Q3 operating loss would be a whopping $410-$810 million, what would be the biggest operating loss in years. That this will happen even as AMZN expects net sales to grow between 15% and 26% from a year ago to $19.7 - $21.5 billion is truly disturbing.

As to what is really going on with the business, the following charts should explain it all, starting with perhaps the most important one of all. In Q2, AMZN's LTM Operating Margin just dropped to 0.8%, quite possibly the lowest print since Lehman if not before.

Not only is Amazon growing sales, it is also growing its army of part-time workers, which in Q2 rose to a record 132,600, up a massive 37% from 97,000 a year ago. However, no such luck for the company's global net sales growth, which just dipped back to 22%: the lowest number in recent history.

Thos curious how the company's business is doing on a net and operating income basis in the last 4 years, here is the answer.

An uglier picture is revealed when looking only at the all important operating margin: at 0.1% in Q2, it was only the 3rd time AMZN has had a negative quarterly margin since Lehman.

To avoid the confusion of seasonality, we show just Q2 in the past five years. The Operating and Net Income trends are clear.

But by far the worst trend is that in operating margin. It needs no commentary.

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Remember, it's all the snow's fault: none of the above has anything to do with the state of the US consumer.

I'd like to think my wife had something to do with this. Usually I'd come home 3-4x a week and see an Amazon box sitting around. Now Google Shopping Express is at our house 4-5x a week dropping crap off.

exactly, Bezos has been "building a moat" around a tiny margin/no barriers to entry business, same with "web services" is he gonna beat out CRM, CSCO, HPQ, IBM etc. at their own game? ... or just keep cutting the price until everyone loses...what a fuk'n joke...

3) loss of the private sector Middle Class buyers who will pay more for something Brand New and 2-day delivery with Prime; and

4)...i forgot #4 but it's there.

A seller can ship a 1 pound item (dress, etc) to NYC thru their chinese post office with signature confirm cheaper in many cases then a seller in USA can ship it from what my neighbor say swho used to sell old records and phonograph equipment before he went belly up last year.

Capital One had a great quarter. All kinds of new debt going around. But no one is buying anything. Strange indeed. Has anyone looked at a ten year chart of the Down Jones and seen how the volume is looking the past three months? Shocking to say the least. I gove this rickshaw ride six months tops before either the wheels fall off or the chinese man pulling the cart gets stabbed by a Honduran invader.

Since market valution has almost nothing to do with earnings these days why are these companies still forced to divulge this proprietary and often embarrassing information to the public?

You don't see this kind of thing happening in The UK right now where the AAIB (Air Accidents Investigations Branch) are busy listening to the final moments of the MH17 cockpit voice recorder.

"They have the kit to analyse in minute detail what can be heard in the last few minutes of flight MH17. The information is incredibly sensitive so investigators gather in a sealed room so that only those who should be listening can listen."

The operating loss was "only" $15 million compared to an expectation of $64 million, however this appears the result of pulling forward wales into Q2

I have to say that it seems a bit unfair to drag Wales into it. And while it's not a big country, I'm surprised that all of it would fit into Amazon's Q2. Even more surprised that it's worth only $49 million.

My wife keeps ordering from these fuckers, any time she remembers something. So, they get to pay for 2 day delivery (prime membership), every time she remembers some book or doo-dad that she wants/needs.

No wonder they are losing money. How much is 2 day shipping on a 6.99 book or oven glove?

Pretty much. Cars sell to people who aren't going to pay back the loan.

Everything you need to know was in that housing report this morning. No buyers. And they revised previous months, because I guess the buyers gave the houses back to the sellers and moved their furniture back out.

It is hard to see why Amazon has any fans when you consider how they abuse and exploit the brick and mortar stores that line streets throughout America. These are the stores that employ our family members, support little league teams in the community, and add value to our lives.

These stores build or lease space, buy supplies from the other local businesses, and pay both sales and real-estate taxes. While Amazon sends out the signal that their customers are smart, forward thinking, and upscale they exploit America and have an evil side, this is a side we should and must recognize. More on this subject below.

I noticed that some prices were higher there on things I bought in the recent past. I use the site: http://www.camelcamelcamel.com to see how prices on items fluctuate over the year at Amazon. That site can save you lots of money if you need to buy stuff from Amazon.

Here's a couple examples on how prices change over time on items at Amazon:

Amazon specializes in hype and not profits! Words like "evolving" are used to describe Amazon's business model, a better word might be undefined. Regardless Amazon rolls on. Pointing towards gaining synergy as they continue to buy companies, some unproven. The revenues from these companies add to their growth but still no profits exist. Beware Amazon is far from transparent.

I contend this growth mask a weakness at their core? If they are indeed a distribution company their stock should be trading at around 18 times earnings. When you look for a P/E ratio on Amazon you find NA because the company makes no money. Another key weakness is that new competition can now cheaply and easily replicate the most profitable parts of Amazon and cherry pick much of their future potential. The bigger they are, the harder they fall, it is only a question of time. More on this subject below.